Month: January 2010

Dragon and Phoenix

Shown here is a woodcut of a dragon and a phoenix.  In Chinese tradition, they represent action and reflection, respectively.  American managers typically prize execution above all, with the result that they are poor planners.  Working in Europe, I found just the opposite.  It is rare to find a manager who is truly talented at both.

Deming saw planning and execution as a cycle.  You take some action, and then gauge the results before acting again.  Management consultants use a four-stroke cycle called Plan, Do, Study, Act (PDSA).

Note how the dragon and phoenix circle each other in the woodcut, like yin and yang.  If you studied management, you may be aware that the Deming cycle dates back to 1938.  You may not have known that it dates back to the Ming dynasty.

Brockman Cracks Down on Interfaces

At lunch today, a colleague asked me what Reynolds’ strategy might be, with regard to shutting down DMS integration.  We have both worked on “unsanctioned” interfaces previously, and he wondered if dealer backlash might yet force Reynolds to change course.

They offer “certified” alternatives, which generally do not meet the commercial or technical needs of the ancillary systems. 

Most readers of this blog already know the story.  Dealers depend on their DMS, but they also need several other systems.  These ancillary systems share data with the DMS using a variety of techniques, none deemed safe or reliable by the DMS vendors.

For as long as I can remember, the vendors (ADP as well as Reynolds) have threatened to shut down these rogue interfaces.  They offer “certified” alternatives, which generally do not meet the commercial or technical needs of the ancillary systems.  With no DMS interface, the ancillary systems perform poorly.  The dealers suffer, and then defect to another DMS.

So, my friend wondered, will Reynolds continue shutting down DMS interfaces even if it means alienating scores of dealers?  Is the new CEO, Bob Brockman, really so adamant?  Well, I said, Mr. Brockman is known to prefer high margins rather than market share.

I observed that, under Brockman, Reynolds has ramped up its software development capacity.  He must recognize that every ancillary system represents a weakness in Reynolds’ product line, and every interface enables a competitor.

In Brockman’s position, I would first redouble my efforts to compete across the product line, and then I would cripple my competition by shutting down their DMS interfaces.  When dealers complained about losing their favorite, say, desking system, I could then offer an integrated product suite – without those nasty security issues.

This strategy is exactly how Microsoft parlayed the dominance of Windows™ into dominance for its Office™ suite.